The nonprofit Urban Land Institute said that increases in real estate performance are expected this year in most areas. Honolulu, however, still suffers from a low level of consumer confidence, the Washington-based institute said.
The institute's outlook for Honolulu is for increasing demand for housing, because of stable prices and low interest rates, once the economy begins to show improvement. Hawaii economists have said that the state's economy is turning around and should do better next year.
ULI said residential real estate statistics based only on resales of existing homes paint an overly negative picture. The overview is still negative but, with about 1,500 new homes coming into the market each year recently, it shows some signs for optimism, according to the ULI report.
Looking at resales alone, there was a 30 percent drop in Oahu sales last year. Adding in the new units as well, the decline was 20 percent, ULI reported.
On the commercial side, the downtown Honolulu office market may continue to soften in the next few years, as the new First Hawaiian Bank Center next year takes tenants from surrounding buildings and increases the vacancy rate, ULI said.
State and local government budget cuts also are creating vacancies.
"While the state's economy appears to be gradually recovering, without further job growth and expansionary support from our industries, we can expect more downsizing in the overall office market," said the Honolulu section of what ULI said is the first edition of an annual national real estate forecast publication.
The organization relied on the Honolulu offices of KPMG Peat Marwick, CB Commercial and Prudential Locations Inc. for its Hawaii information.